How will indirect job creation work for my project?

I am looking at an EB-5 project that has received I-924 approval (actual project with exemplar I-526 petition). I was told that this project only uses indirect job creation, because the construction is less than 24 months. According to the I-924 document, this project can create 17 indirect jobs per EB-5 applicant, which seems very secure to get an I-829 approval when the time comes. 1) What concerns do you have with this job creation based on the limited information? 2) This project is financed by both the government and EB-5 investors. How much capital expenditure will be used for the EB-5 job creation calculation? Will only the portion injected by EB-5 investors be used? 3) How will the timing of the capital injection impact the job creation? For example, the project will be completed in the coming July, but the fund won''t be released to constructor from an escrow account until the EB-5 investor gets I-526 approval, which will be later than the construction completion date.

Answers

Actually, the fact that the EB-5 project in question has an exemplar I-526 petition is a good omen. Also, don''t doubt too much on the job creation based on the information you were provided. Further, the fact that the project enjoys both the funding patronage of the government and EB-5 investors is actually a positive attribute. If nothing else, it shows the project benefits from a significant economic development attention from both the public and private sectors. However, be aware that the management of this EB-5 project will determine the pace of construction, timing of infusion of funding and how EB-investment funds will be released (considering that EB-5 funds are escrowed). Thus, bear in mind all these management decisions are clearly beyond the control of potential EB-5 investors. If you need further info for operations of this type of EB-5 project, consult an EB-5 attorney. Proceed with caution and get good legal counseling, since you have so many questions on this project.

These are fairly specific (fact-specific) questions that would require close review of the project documentation, including the business plan and the economic impact report. In general, if the USCIS has approved an exemplar I-526 petition, then if the actual I-526 petitions filed are identical to the exemplar that was approved, they are entitled to deference by the USCIS, which means they should be approved. Furthermore, in two years, if the project does what it projected (minor changes and delays are okay) in the business plan and economic report, then the I-829 petitions should be approved also, and the investors will received their permanent green cards.

Exemplar approved projects are a good starting point since USCIS has approved the project. Of course, if the project changes, this level of deference no longer remains. It would be important to determine whether the project remains the same. Keep in mind, USCIS would still need to separately approve your I-526 petition. Regarding your particular questions, it is difficult to respond without reviewing the actual details; however, quite generally: 1) as you noted, with construction less than 24 months, only indirect and induced jobs can be counted no real issue here; 2) Without seeing the budget, it would be hard to determine what portion will actually utilize EB-5 funds. As a general matter, your $500,000 will go towards the project either directly, or to replace some sort of temporary financing; 3) the developer may be proceeding with bridge financing to complete the project. The jobs have to be created within 2.5 years from the time your I-526 petition is approved. I would need more detail to answer this question. I am happy to offer you a complimentary consultation to further discuss.

Lots of good questions! 1. Some economists consider all jobs created by regional center projects to be indirect, especially with a loan model (as the new commercial enterprise doesn''t actually hire anyone), and when construction is less than 24 months. That is, operations jobs won''t exist for long enough when the I-829 is filed and the construction jobs are done. Therefore, it is all indirect employment creation. 2. Any economic model''s inputs need a basis in an expenditure, which can be EB-5 funded or non-EB-5 funded. However, we would consult with a qualified economist to confirm. 3. Generally, the jobs must be created before filing the I-829. We would need more detail and the involvement of an EB-5 economist to develop a proper and approvable strategy.

You definitely ask thought provoking questions which can be answered by your experienced EB-5 attorney. With the assistance of the EB-5 attorney and an experienced EB-5 economist, you will be able to develop a strategy and acceptable construction timeline to show how the required jobs will be created indirectly.

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